Insiders at Prudential PLC Buy Stock After Banking Crisis Sends Share Price Down

Insider transactions can give investors a better understanding of what’s happening within a publicly-traded company. No one has more information in relation to a company, and its prospects, than its executives and directors.

In this report, we are going to highlight some interesting insider buying at Prudential PLC (PRU:LN). Prudential is a financial services company that offers a range of retail financial products and services. After demerging its European and American operations in recent years, it is now purely focused on Asia and Africa. It is listed on the London Stock Exchange and the Hong Kong Stock Exchange and currently has a market capitalization of approximately £30.37 billion.

Insider Buying at Prudential

Our data shows that in the second half of March, two insiders at Prudential purchased company stock.

On March 17, board member Claudia Suessmuth Dyckerhoff bought 4,800 shares at a price of GBP £10.27 per share. This trade cost the insider approximately £49,400.

Then, on March 24, board member Chua Sock Koong bought 7,500 shares at a price of GBP £10.71 per share. This trade cost the insider approximately £80,300.

Furthermore, on March 29, board member George Sartorel bought 5,000 shares at a price of GBP £10.75 per share. This trade cost the insider approximately £53,750.

Experience Across Asia 

All three of these insiders have significant experience across Asian markets.

Ms. Suessmuth Dyckerhoff previously worked at McKinsey & Partners where she was responsible for helping to build the firm’s healthcare services and systems sector in Asia Pacific.

Meanwhile, Ms. Sock Koong previously worked at Singapore Telecommunications Limited (Singtel), Asia’s leading communications technology group, where she held a number of senior roles including CEO, CFO, and Treasurer.

In addition, with a career spanning almost 40 years, Mr. George Sartorel has extensive exposure of the insurance sector. He previously held the office of CEO at Allianz’s Asia Pacific, while holding a wide range of senior roles for Allianz in the past. He holds a Master’s Degree in International Business Studies, so he surely knows the dynamics of global markets.

It’s worth noting that Ms. Sock Koong has obtained the Chartered Financial Analyst (CFA) qualification, so she is likely to have a good understanding of Prudential’s financials and investment potential.

Dragged Down by the US Banking Crisis

Prudential’s share price has fallen recently amid uncertainty related to the US banking crisis. Investors have been concerned that the insurer may have racked up losses on its bond investments.

The share price fall here does not look justified though. In a recent research note, analysts at JP Morgan pointed out that insurers do not take asset-liability duration risks and are heavily incentivized not to do so, citing the EU's Solvency II regime, which is designed to ensure the adequate protection of policyholders and beneficiaries.

JP Morgan’s analysts pointed out that insurers have more solid balance sheets than market fears suggest and do not face the same liquidity issues as the banking sector does.

"We believe the risks to the European Insurance sector from the types of mark-to-market losses, capital issues and liquidity concerns at SVB do not have any significant read across to the European insurance sector," wrote its analysts.

It’s worth noting that JP Morgan recently raised its price target for Prudential from 1,750p to 1,850p – about 65% above the current share price.

Clearly, the insiders here see the recent share price weakness here as a buying opportunity.

We see this insider buying as a bullish signal.